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AIA Group Pulls Trigger on Coal Investment Exit

   By Fabiana Negrin Ochoa 
 

AIA Group Ltd. plans to divest itself entirely of its coal mining and coal-fired assets, in a move the insurer says will safeguard the sustainability of its investment portfolio.

A spokesperson for the APAC-focused insurance giant said Thursday that the move is in line with its support for the 2018 Paris Agreement goals and its "efforts to support the health and wellness of our communities."

AIA, which has ruled out fresh investments in coal, didn't disclose the amount of coal-linked assets it holds. According to a report from the Institute of Energy Economics in December last year, AIA held between US$4 billion and US$6 billion in coal and coal-fired power assets.

The insurer had drawn fire from activist groups who claimed it was still too wrapped up in coal despite the steps it was taking to decarbonize, becoming the subject of a campaign titled "AIA Kick Out Coal" that urged it to unwind its coal investments. The campaign was formed by Insure Our Future--a network of NGOs and social movements--and the advocacy group SumOfUs.

AIA declined to comment on the campaign.

The Hong Kong-listed company, which started carbon footprinting its portfolio in 2019, said it plans to cut directly and externally managed equity exposure to coal by the end of the year and by end-2028 for its fixed-income assets.

AIA, which has a market cap of about US$151 billion according to FactSet, joins a growing list of insurers seeking to decarbonize their portfolios.

According to a report from the Boston Consulting Group late last year, insurers made up 12 of the 26 members of the U.N.-convened Net-Zero Asset Owners Alliance, a coalition of institutional investors with US$4.6 trillion under management that pledged carbon-neutral portfolios by 2050.

BCG notes that for insurers, one payoff of integrating climate risk into their investment processes is that it could make them more competitive in winning third-party investment mandates from institutional investors such as pension funds.

 

Write to Fabiana Negrin Ochoa at fabiana.negrinochoa@wsj.com

 

(END) Dow Jones Newswires

March 18, 2021 03:22 ET (07:22 GMT)

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